September 9, 2016
Transforming Canada’s Health Funding Arrangements
A rapidly aging population will strain provinces’ current health care delivery models. Transformation in the sector is urgently needed.
Provinces cannot face this challenge on their own, and nor should they have to. Transformational change in the health care sector needs a transformational partnership between Canada’s orders of government. A long-term agreement on health care funding should reflect the original bargain between the federal government and the provinces to share, as partners, the costs of delivering health care. As the federal government reprises its role as a funding partner for health care, provinces should lever additional federal support into investments that will adapt their health care systems to respond to the strains an aging population will place on them.
Canada’s universal health care system is both a point of national pride and a defining characteristic of the country. It is also facing significant pressures that can only be addressed through a stronger partnership between the federal government and the provinces.
The establishment of universal medical and hospital care across Canada 50 years ago was accomplished through a cost-sharing partnership between the federal government and the provinces. In the decades following this original bargain, the federal government has moved, often unilaterally, away from the cost-sharing model for health care.
The federal government’s current approach to funding health care is agnostic to the cost pressures provinces face and leaves them on their own to confront the challenges facing their health care systems. This is not sustainable. A rapidly aging population will strain provinces’ current health care delivery models. Transformation in the sector is urgently needed. Provinces cannot face this challenge on their own, and nor should they have to. Transformational change in the health care sector needs a transformational partnership between Canada’s orders of government.
At this summer’s meeting of the Council of the Federation, Premiers drew attention to the pressure that the imminent reduction in the Canada Health Transfer (CHT) escalator will place on provincial and territorial health systems. Premiers also called for a meeting with the Prime Minister this fall, dedicated to advancing a long-term agreement on health care funding.
To that end, this paper calls for a transformational health care partnership and puts forward the following recommendations:
Restore the health care funding partnership by returning, within five years, to the “cost-sharing” levels that were last agreed upon by federal and provincial governments under the Established Programs Financing (EPF) arrangements.
Enhance provincial efforts to achieve transformational change in the health care sector through a combination of predictable, flexible and fairly allocated federal funding enhancements, transparent provincial action, and effective use of the federal government’s consensus-building power.
Create a pan-Canadian institution for transparency and accountability in health care, co-funded by but independent from the federal, provincial and territorial governments, operating under a clearly-defined mandate to conduct value-for-money assessments with an end goal of promoting both the quality and fiscal sustainability of provincial health care systems.
September 9, 2016